Accounting question on company stock

[noleclone2]

For the accountants like @SeaPA or those who stayed in a Holiday Inn Express, I am about to get a nice sum of money deposited in my checking account in the next several weeks from the Company stock I had with my prior employee. They are not holding out any taxes and will give me an 1099-B in February 26.

About 1/3 of the stock was bought straight up so will be straight forward I presume on calculating the capital gains. However about 2/3rds were bought with options at a lower rate than the going share price.

Here is where it get complicated for a dumb geologist like me. At the time of accepting the options, I had to pay taxes on the gain like it was income even though I did not cash out. Meaning if I had 100 shares for 50 bucks I paid for that were than worth 100 bucks, I already paid taxes on the $5,000 gain that year even though I did not take the actual money.

So for the now cash out of all stock now, for the options, is it safe to say the remaining capital gains is determined therefore on the gain post option play (so in example above gains made above 100 a share)

 

[Formerly Rockymtnole]

By this:

At the time of accepting the options, I had to pay taxes on the gain like it was income even though I did not cash out.

Do you mean you exercised options? In my case I accepted the original grant and they vest over time but I will never pay taxes unless and until I exercise the options. When I exercise it depends if they are ISOs or NSOs (I believe no taxes due on ISOs but AMT considerations and NSO gain might be taxed at that time).

Seems to me if you already paid taxes of some kind you have possibly exercised the options and you now hold shares, so I don’t think you would owe any additional taxes until you actually sell those shares. Tax rate would depend on how long you’ve held the actual shares. In other words, I think you are correct.
Unless I’m missing something.

 

[noleclone2]

By this:

At the time of accepting the options, I had to pay taxes on the gain like it was income even though I did not cash out.

Do you mean you exercised options? In my case I accepted the original grant and they vest over time but I will never pay taxes unless and until I exercise the options. When I exercise it depends if they are ISOs or NSOs (I believe no taxes due on ISOs but AMT considerations and NSO gain might be taxed at that time).

Seems to me if you already paid taxes of some kind you have possibly exercised the options and you now hold shares, so I don’t think you would owe any additional taxes until you actually sell those shares. Tax rate would depend on how long you’ve held the actual shares. In other words, I think you are correct.
Unless I’m missing something.

Thanks. And I was made to pay the taxes as part of buying the option so must have been the NSO type. It actually kind of suck because when paying the taxes, it was a pretty big chunk of change and you had 0.00 for the effort in your account. I basically would use half my bonus to buy.